Why Do Streaming Services Make You Update Your Household?

As the pressure for streaming services to make money heats up, a new "feature" has been proliferating over a few popular options for the past couple of years. It started with Netflix in 2023, when it imposed restrictions that forced users to update their household to confirm their account wasn't being used in multiple locations. Disney, HBO, and Peacock have all implemented the same functionality in various capacities.

The entire "update your household" system is to ensure that the company earns the maximum revenue. When you select a new location as your household, your account stops working everywhere else, which forces you to pay for an extra user or subscription to use the app on multiple houses at once. Streaming companies wanted to capture potentially lost subscribers who were freeloading off others' subscriptions. Netflix's password-sharing crackdown worked dramatically, with millions reported to have signed up after the password sharing ban was imposed.

From the various companies' perspectives, this also allows them to reconfirm that the actual subscriber is using the service within their household. It's not really explained among the help articles, but this doesn't pertain to mobile devices on the go. However, while companies will always come out with reasons for this, it is ultimately about maximizing their earnings.

Despite Warner Bros., NBC, Disney, and Netflix, among others, reporting record users and profits, it was just a few years ago that stagnation hit subscriber bases. Numbers weren't dwindling, but they weren't growing either. As a result, especially amongst the publicly traded companies with streaming services, growth is one of the most important metrics.

It would be great to write how Netflix or HBO Max were doing this to counter actual consumer downsides, but there's nothing like that in that department. In a 2023 newsletter, tech analyst and PR expert Ed Zitron called it the "rot economy." He points out over the course of a few thousand words that the never-ending drive for growth is actively harming consumers and the companies themselves.

This can be seen just about everywhere, outside of the streaming services. Amazon culled an older style of the Prime subscription, dropping those who use the free delivery service outside the original household. In recent days, artificial intelligence companies have switched users over to usage-based billing, rather than just charging a baseline subscription fee, as the real costs of the software, along with driving revenue, are paramount for these businesses now.